A.  Basis of Preparation of Financial Statements
 
 The financial statements are prepared under the historical cost
 convention under accrual method of accounting and as a going concern,
 in accordance with the Generally Accepted Accounting Principles (GAAP)
 prevalent in India and the Mandatory Accounting Standards as notified
 under the Companies (Accounting Standards) Rules, 2006 and according to
 the provisions of the Companies Act, 1956.
 
 B.  Inventories
 
 1.  The inventories of all medicines, medicare items traded and dealt
 with by the Company are valued at cost. In the absence of any further
 estimated costs of completion and estimated costs necessary to make the
 sale, the Net Realisable Value is not applicable. Cost of these
 inventories comprises of all costs of purchase and other costs incurred
 in bringing the inventories to their present location after adjusting
 for VAT wherever applicable, applying the FIFO method.
 
 2.  Stock of provisions, stores (including lab materials and other
 consumables), stationeries and housekeeping items are stated at cost.
 The net realisable value is not applicable in the absence of any
 further modification/alteration before being consumed in-house only.
 Cost of these invento- ries comprises of all costs of purchase and
 other costs incurred in bringing the inventories to their present
 location, after adjusting for VAT wherever applicable applying the FIFO
 method.
 
 3.  Surgical instruments, linen, crockery and cutlery are valued at
 cost and are subject to 1 /3 write off wherever applicable applying the
 FIFO method. The net realisable value is not applicable in the absence
 of any further modification/alteration before being consumed in-house.
 Cost of these inventories comprises of all costs of purchase and other
 costs incurred in bringing the inventories to their present location.
 
 4.  Imported inventories are accounted for at the applicable exchange
 rates prevailing on the date of transaction. (Also refer Note 10 in the
 Notes forming part of Accounts).
 
 C.  Prior Period Items and Extraordinary Items
 
 Prior period items and extraordinary items are separately classified,
 identified and dealt with as re- quired under Accounting Standard 5 on
 Net Profit or Loss for the Period, Prior Period Items and Changes in
 Accounting Policies as notified under the Companies (Accounting
 Standards) Rules, 2006
 
 D.  Depreciation and Amortisation
 
 i.  Depreciation has been provided
 
 a.  On assets installed after 1st April, 1987 on straight line method
 at rates specified in Schedule XIV of the Companies Act, 1956 on a
 single shift basis.
 
 b.  On assets installed prior to 2nd April 1987 on straight-line method
 at the rates equivalent to the Income Tax rates.
 
 ii.  Depreciation on new assets acquired during the year is provided at
 the rates applicable from the date of acquisition to the end of the
 financial year.
 
 iii.  In respect of the assets sold during the year, depreciation is
 provided from the beginning of the year till the date of its disposal.
 
 iv.  Individual assets acquired for Rs.5,000/- and below are fully
 depreciated in the year of acquisition.
 
 v.  Amortization
 
 a.  The cost/premium of land and building taken on lease by the company
 from Orient Hospital, Madurai will be amortised over a period of 30
 years though the lease is for a period of 60 years.
 
 The cost/premium of land and building taken additionally on lease by
 the company at Madurai is for a pe- riod of 9 years with an option to
 extend the lease by another 16 years. The depreciation on the leasehold
 building is charged on a straight line basis with the lease period
 being considered as 25 years.
 
 The Company has taken land in Karaikudi from Apollo Hospitals
 Educational Trust on lease for a period of 30 years. The building
 constructed on the lease land will be amortised over a period of 30
 years. This is in conformity with the definition of lease term as per
 Clause 3 of AS 19 Leases as notified under the Companies (Accounting
 Standards) Rules, 2006.
 
 b.  Lease rental on operating leases is recognised as an expense in the
 Profit & Loss Account on straight-line basis as per the terms of the
 agreement in accordance with Accounting Standard 19 Leases as
 notified under the Companies (Accounting Standards) Rules, 2006.
 
 E.  Revenue Recognition
 
 a.  Income from Healthcare Services is recognised as per the completed
 service contract method. The hospi- tal collections of the company are
 net of discounts. Revenue also includes the value of services rendered
 pending final billing in respect of in-patients undergoing treatment as
 on 31st March 2011.
 
 b.  Pharmacy Sales are recognised when the risk and reward of ownership
 is passed to the customer and are stated net of returns, discounts and
 exclusive of VAT wherever applicable.
 
 c.  Hospital Project Consultancy income is recognised as and when it
 becomes due, on percentage comple- tion method, on achievement of
 milestones.
 
 d.  Income from Treasury Operations is recognised on receipt or accrual
 basis whichever is earlier.
 
 e.  Interest income is recognised on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 f.  Royalty income is recognised on an accrual basis in accordance with
 the terms of the relevant agreement.
 
 g.  Dividend income is recognised as and when the owners right to
 receive payment is established.
 
 F.  Fixed Assets
 
 a.  All Fixed Assets are stated at their original cost of acquisition
 less accumulated depreciation and im- pairment losses are recognised
 where necessary (Also refer Clause N in the Notes forming part of the
 Accounts). Additional cost relating to the acquisition and installation
 of fixed assets are capitalised.  Wherever VAT is eligible for input
 availment, Fixed Assets are stated at cost of acquisition after
 deduction of input VAT.
 
 b.  Capital work - in - progress comprises of outstanding advances paid
 to acquire fixed assets and amounts expended on development/acquisition
 of Fixed Assets that are not yet ready for their intended use at the
 Balance Sheet Date. Expenditure during construction period directly
 attributable to the cost of assets on projects under implementation is
 included under Capital work- in -progress, pending allocation to the
 assets.
 
 c.  Assets acquired under Hire Purchase agreements are capitalised to
 the extent of principal value, while finance charges are charged to
 revenue on an accrual basis.
 
 d. Interest on borrowings for acquisition of Fixed Assets and related
 revenue expenditure incurred for the period prior to the commencement
 of operations for the expansion activities of the company are
 capitalised.
 
 G.  Transactions in Foreign Currencies
 
 a.  Monetary items relating to foreign currency transactions remaining
 unsettled at the end of the year are translated at the exchange rates
 prevailing at the date of the Balance Sheet. The difference in
 translation of monetary items and the realised gains and losses on
 foreign exchange transactions are recognised in the Profit & Loss
 Account in accordance with Accounting Standard 11 - The Effects of
 Changes in Foreign Exchange Rates (Revised 2003), as notified under
 the Companies (Accounting Standards) Rules, 2006 (Also refer Note 10 in
 the Notes forming part of Accounts).
 
 b.  Exchange differences arising on settlement or restatement of
 foreign currency denominated liabilities borrowed for the acquisition
 of Fixed Assets, are recognised in the Profit and Loss Account which is
 in ac- cordance with Accounting Standard 11 The Effects of Changes in
 Foreign Exchange Rates, (Also refer Note 10 in the Notes forming part
 of Accounts).
 
 c.  The use of foreign currency forward contract is governed by the
 companys policies approved by the Board of Directors. These hedging
 contracts are not for speculation. All outstanding derivative instru-
 ments at close are marked to market by type of risk and the resultant
 profits/losses relating to the year, if any, are recognised in the
 Profit and Loss Account. (Also refer Note 21 in the Notes forming part
 of Ac- counts).
 
 H.  Investments
 
 Investments are classified as current or long term in accordance with
 Accounting Standard 13 on Accounting for Investments
 
 a.  Long-term investments are stated at cost to the Company in
 accordance with Accounting Standard 13 on Accounting for Investments.
 The Company provides for diminution in the value of long-term
 investments other than those temporary in nature.
 
 b.  Current investments are valued at lower of cost and fair value. Any
 reduction to the carrying amount and any reversals of such reductions
 are charged or credited to the Profit and Loss Account.
 
 c.  On disposal of an investment, the difference between the carrying
 amount and net disposal proceeds is charged or credited to the Profit
 and Loss Account.
 
 d.  In case of foreign investments,
 
 i.  The cost is the rupee value of the foreign currency on the date of
 investment.
 
 ii.  The face value of the foreign investments is shown at the face
 value reflected in the foreign cur- rency of that country.
 
 I.  Employee Benefits
 
 Short-term employee benefits (benefits which are payable within twelve
 months after the end of the period in which the employees render
 service) are measured at cost.
 
 Long-term employee benefits (benefits which are payable after the end
 of twelve months from the end of the period in which employees render
 service), and post employment benefits (benefits which are payable
 after completion of employment), are measured on a discounted basis by
 the Projected Unit Credit Method, on the basis of annual third party
 actuarial valuations.
 
 Defined Contribution Plan
 
 The Company makes contribution towards Provident Fund and Employees
 State Insurance as a defined contribu- tion retirement benefit fund for
 qualifying employees.
 
 The Provident Fund Plan is operated by the Regional Provident Fund
 Commissioner. Under the scheme, the Company is required to contribute a
 specified percentage of payroll cost, as per the statute, to the
 retirement benefit schemes to fund the benefits. Employees State
 Insurance dues are remitted to the Employees State In- surance
 Corporation.
 
 Defined Benefit Plans
 
 For Defined Benefit Plan the cost of providing benefits is determined
 using the Projected Unit Credit Method with actuarial valuation being
 carried out at each Balance Sheet date. Actuarial Gains or Losses are
 recognised in full in the Profit and Loss Account for the period in
 which they occur.
 
 a.  Gratuity
 
 The Company makes annual contribution to the Employees Group
 Gratuity-cum-Life Assurance Scheme of the ICICI and Life Insurance
 Corporation of India, for funding defined benefit plan for qualifying
 employees which is recognised as an expense. The Scheme provides for
 lump sum payment to vested employees at retirement, death while in
 employment, or on termination of employment of an amount equivalent to
 15 days salary payable for each completed year of service, or part
 thereof in excess of six months. Vesting occurs upon completion of five
 years of service. The Company restricts the payment of gratuity to the
 employees below the rank of General Managers to the limits specified in
 the Payment of Gratuity Act, 1972. However the company complies with
 the norms of Accounting Standard 15.
 
 b.  Leave Encashment Benefits
 
 The Company pays leave encashment benefits to employees as and when
 claimed, subject to the policies of the Company. The Company provides
 leave benefits through annual contribution to the fund managed by HDFC
 Life.
 
 J. Borrowing Cost
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised as part of the cost
 of such assets. As per Accounting Standard 16 Borrowing costs, a
 qualifying asset is one that takes a necessarily substantial period of
 time to get ready for its intended use. All other borrowing costs are
 expensed as and when incurred.
 
 K. Segment Reporting
 
 Identification of Segments
 
 The Company has complied with Accounting Standard 17- Segment
 Reporting with Business as the primary seg- ment.
 
 The Company operates in a single geographical segment, which is India,
 and the products sold in the pharmacies, are regulated under the Drug
 Control Act, which applies uniformly all over the Country. The risk and
 returns of the enterprise are very similar in different geographical
 areas within the Country and hence there is no report- able secondary
 segment as defined in Accounting Standard 17.
 
 Segment Policies
 
 The accounting policies adopted for segment reporting are in line with
 the accounting policies adopted in con- solidated financial statements
 with the following additional policies for Segment Reporting:
 
 i.  Revenue and expenses have been identified to segments on the basis
 of their relationship to the operating activities of the segment.
 Revenue and expenses, which relate to the enterprise as a whole and are
 not allocable to segments on a reasonable basis, have been included
 under unallocable expenses.
 
 ii.  Inter segment revenue and expenses are eliminated.
 
 The Company has disclosed this Segment Reporting in Consolidated
 Financial Statements as per para (4) of Ac- counting Standard - 17-
 Segment Reporting.
 
 L.  Earnings per Share
 
 In determining the earnings per share, the Company considers the net
 profit after tax before extraordinary item and after extraordinary
 items and includes post - tax effect of any extraordinary items. The
 number of shares used in computing the basic earnings per share is the
 weighted average number of shares outstanding during the period. For
 computing diluted earnings per share, potential equity shares are added
 to the above weighted average number of shares.
 
 M.  Taxation
 
 i.  Income Tax
 
 Income tax is computed using the tax effect accounting method, where
 taxes are accrued in the same period as and when the related revenue
 and expense arise. A provision is made for Income Tax annually based on
 the tax liability computed after considering tax allowances and
 exemptions.
 
 ii.  Deferred Tax
 
 The differences that result between the profit calculated for income
 tax purposes and the profit as per the finan- cial statements are
 identified and thereafter deferred tax asset or deferred tax liability
 is recorded for timing differences, namely the differences that
 originate in one accounting period and get reversed in another, based
 on the tax effect of the aggregate amount being considered. Deferred
 tax asset are not recognized unless there is virtual certainty that
 sufficient future taxable income will be available against which such
 deferred tax asset can be realized. The tax effect is calculated on the
 accumulated timing differences at the beginning of this ac- counting
 year based on the prevailing enacted or substantively enacted
 regulations.
 
 N.  Impairment
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 to ascertain if there is any indication of impairment based on
 internal/external factors. An asset is treated as impaired based on the
 cash generating concept at the year end, when the carrying cost of
 assets exceeds its recoverable value, in terms of Para 5 to Para 13 of
 AS-28 Impairment of Assets as notified under the Companies
 (Accounting Standards) Rules, 2006 for the purpose of arriving at
 impairment loss thereon, if any. An impairment loss is charged to the
 Profit and Loss Account in the year in which an asset is identified as
 impaired. The impairment loss recognized in prior account- ing periods
 is reversed if there has been a change in the estimate of the
 recoverable amount.
 
 O.  Bad Debts Policy
 
 The Board of Directors approves the Bad Debt Policy, on the
 recommendation of the Audit Committee, after the review of debtors
 every year. The standard policy for write off of bad debts is as given
 below subject to manage- ment inputs on the collectability of the same,
 
 P.  Miscellaneous Expenditure
 
 Preliminary, Public Issue, Rights Issue Expenses and Expenses on
 Private Placement of shares are amortised over a period of 10 years.
 
 Q.  Intangible Assets
 
 Intangible assets are initially recognised at cost and amortised over
 the best estimate of their useful life. Cost of software including
 directly attributable cost, if any, acquired for internal use, is
 allocated / amortised over a period of 36 months to120 months.
 
 R.  Provisions, Liabilities and Contingent Assets
 
 A provision is recognised when the company has a present obligation as
 a result of a past event and it is probable that an outflow of
 resources embodying economic benefits will be required to settle the
 obligation and a reliable estimate can be made of the amount of the
 obligation.
 
 Contingent liabilities are not provided for unless a reliable estimate
 of probable outflow to the Company exists as at the Balance Sheet date.
 Contingent assets are neither recognised nor disclosed in the financial
 statements.